An affordable housing development bringing dozens of units to downtown Allentown will move forward after receiving $14.3 million from the state.
Cortex Residential, a private company that specializes in affordable apartments financed by state and federal tax credits, expects to break ground on Walnut Square Apartments in early 2025, according to co-founder Jonathan Strauss.
Walnut Square Apartments, at 40 S. Eighth St., will replace a parking lot and parish house next to Life Church in Allentown. The Pennsylvania Housing Finance Agency announced the award for Cortex as well as 40 other agencies proposing developments across the state.
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“While there is much work to be done, Walnut Square represents a critical step in addressing the affordable housing crisis locally, and we are proud to be a part of the solution,” Strauss said in a news release.
The Lehigh Valley has seen rents and home prices soar over the last several years in an unsustainable pattern, which was highlighted last year in The Morning Call’s Room for More? series.
Walnut Square will have 29 one-bedroom, three two-bedroom and six three-bedroom apartment units. The number of units is scaled down from the 52 that were proposed last year, but the building will still serve the same number of residents — around 80 — because Cortex opted to add three-bedroom apartments, Strauss said.
“We felt it was important to include family units,” Strauss said. “There’s been virtually no family product developed in downtown Allentown.”
The building will also have a lobby, community room, and management and supportive services offices.
The units will be dedicated as “affordable” for people making below the area median income, meaning the cost of rent will be no more than 30% of that income. Specifically, four units will be designated for people below 20% of area median income, and the rest will be designated for people at 50% to 60% of the area median income.
“As the fastest growing region in the commonwealth, we need to offer more opportunities for housing,” said state Sen. Nick Miller, D-Lehigh, whose district include Allentown. “Thank you to the PHFA for recognizing the Lehigh Valley as deserving of this tax credit award.”
Construction is expected to take 12-14 months, Strauss said.
The tax credit award will grant Cortex around $1.43 million on a yearly basis for the next 10 years, totaling around $14.3 million to finance the project, Strauss said.
In addition to the tax credit funding, Cortex also benefited from a $2 million grant from Allentown and around $600,000 from Lehigh County, both from American Rescue Plan coffers.
Cortex Residential was co-founded in 2021 by Strauss, who previously worked for prominent Allentown developer City Center Investment Corp. Strauss said City Center founder J.B. Reilly has been “very supportive” of Cortex — City Center will provide parking for future Walnut Square tenants at a nearby lot.
Cortex also recently announced plans to buy a property on South Seventh Street to convert into affordable apartments ; Lehigh County, which owns 43-47 S. Seventh St., will vote on the sale next week.
Reporter Lindsay Weber can be reached at Liweber@mcall.com .
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